1The Cost of Debt and Federal Home Loan Bank Funding at U. S. Bank and Thrift Holding
Bibliographic record
Abstract
Abstract: The purpose of this study is to investigate the relationship between bank and thrift holding companies ’ (BHCs ’ and THCs’) cost of uninsured debt, membership in Federal Home Loan Banks (FHLBs), and reliance on FHLB funding. The cost of uninsured debt is proxied using yield spreads calculated from trading data on holding company (HC) bonds from a previously unused source in FHLB studies, the Financial Industry Regulatory Authority’s (FINRA’s) Trade Reporting and Compliance Engine (TRACE). Several interesting results are obtained. In a regression of HC cost of debt on HC reliance on advances and other variables, reliance on advances is found to have a negative effect on the cost of debt throughout the time period studied, from the third quarter of 2002 to the first quarter of 2009. However, in a regression of HC reliance on advances on HC cost of debt and other variables, cost of debt is found to have a significant effect during the subprime mortgage crisis, from the third quarter of 2007 through the first quarter of 2009, when the effect was negative. FHLB membership, independent of advances, is found to have no influence on HC cost of debt. The results indicate that the relationship between reliance on advances and cost of debt is not simultaneous, as implied by a model presented in Stojanovic, Vaughan, and Yeager (2008). They also suggest that BHCs and THCs, on the whole, do not use FHLB advances to make unusually risky loans as argued in Nickerson and Phillips (2004), Flannery and Frame (2006), and Stojanovic, Vaughan, and Yeager (2008). Additional analysis indicates that Office of Thrift Supervision (OTS) regulation is associated with higher cost of debt than Federal Reserve regulation.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.001 | 0.006 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.002 | 0.003 |
| Science and technology studies | 0.001 | 0.000 |
| Scholarly communication | 0.002 | 0.001 |
| Open science | 0.001 | 0.001 |
| Research integrity | 0.001 | 0.001 |
| Insufficient payload (model declined to judge) | 0.012 | 0.001 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".